tv Moyers Company PBS October 24, 2012 1:00am-2:00am PDT
♪ this week on "moyers & co." >> weave this kind of community of rich people who genuinely believe that they are the wealth w create evers and tt they should get every advantage and break, whereas everybody else is a parasite and they're living off of them. >> how dare they have the gall to actually argue that too much regulation of american financial services is what is killing the economy.he >> funding is provided by carnegie corporation of nw york. celebrating 100 years of philanthropy and committed to doing real and permanent good in the world. the kohlberg fundation.
independent production firm with support from the rt religion foundation. a john and pauley guff charitable fund. the clement foundation. park foundation,rt dedicated t heightening public awareness of critical issues. the herb albert foundation, supporting organizations whose mission is to t promote compassn and creativity in our society. the bernard and addry rapportso foundation. the john d. and katherine t. mcarthur foundation. committed to building a more just, verdant and peaceful world. more information at mackfound.org. the bessie and jesse sync foundation. the hkh fodation. barbara j. fleischmann, and by our sole corporate sponsor, mutual of america, designing customized individual and group retirement products. that's y we're your retirement company. welcome. t'e new gilded age is roaring down on us. an uncaged tiger on a rampage.
walk out to the street in front of our office and turn right, and you can see the symbol of it. skyscraper, going up two blocks away. when finished, this high rise among high rises will tower 1,000 feet. the tallest residential building in the city. "the new york times" has dubbed it the global billionaire's club, and for good reason. at least two of the apartments are under contract for more than $90 million each. others, more modest, range in price from $45 million to more than $50 million. simuaneously, the powers that be have just awarded donald trump, yes, that donaldan trum the rightto run a golf course in the bronx which taxpayers are spending at least $97 million to build. what amounts to a public indignant cityhe comptroller for a luxury golf course. good grief. a handout to the pollute contracts.
this is a city where economic inequality rivals that of a third world country. of america's 25 largest cities new york is now the most unequal. the median income for the bottom 20% last year was less than $9,000. while the top 1%f new yorkers has an average income of $2.2 million across america this divide between the super rich and everyone else has become a yawning chasm. at no time in modern history has the top 100th of 1% owned more of our wealth or paid so low a tax rate. but in neither of t two presidential debates so farf ha the vastness of this astounding inequality gap been discussed. not by mitt romney h who is the embodiment of the mnpredatory world of financial capitalism. and not even by baprck obama, ckose party once fought for women against
the economic loyalists. so just in time, if not too late, comes this definitive examination of inequality. plute contracts, the rise of the new global supervich and the fall of yaef one else.lu the author is chryia freeman, whose journalism is steeped in years of covering robber barons from mexico andia india. once deputy editor of the globe and mail in canada and the correspondent for the financial times and the economists she is now the editor o thompson reuters digital. we're joined matt taibbi who has made the magazine rolling stone a go-to source for understanding the financial scandals in rural america. who can forget his 2009 article on the great american bubble machine. which describes goman sachs as a great vampire squid wrapped around the face of humanroy
relentlessly so jabbing its blood funnel into anything that smells like money. welcome to you both. income inequality has soared to the highest level since the great depression. with the top 1% taking 93%y of the income earned in the93 firs year after the recovery. the first full yr after the recovery. why are the two candidatesllot talking about inequality growing at breakneck speed? >> you know, i think because it is still a taboo in american political life. and in american cultural life. one of the economists i talked to who works for the world bank, and he said to me, you ow, and he's a specialist in income inequality. he said when you go to think tanks and you say you'd like to do a study about poverty, they say that's fine, that's reat. we're happy to fund it. because writing about poverty makes everybody feel good.re and feel that they're being charitable.
but if you say i want to study income inequality, and even s mt dangerously, i want to study what's happening at the very top of the distribution, what they said to me is the think tanks immediately pull away. because they say our donors won't like it. and that actually challenges the whole economic setup of the united states. and of western capitalism. it's very, very threatening. and i think that that's why you've had the billionaire class. you know, the minute barack obama -- i would actually say rather gentlyauggested that the millionaires and the billionaires should pay a little bit more, y had immediate cries of class warfare from the plutocrats, and very emotional. you know, there was an activist investor who sent an e-mail to his friends, the subject line is, battered wives. and in the e-mail, he compares himself and his fellow multimillionaires to battered wives who are being beaten by
the predent. he actually uses those words. >> and i thought it was really interesting, in your book, how you pointed out that bill clinton himself responded to obama's criticism by saying, you know, i would have done it a little bit differently. i think, you know, you can't attack these people for their success. and i think that's very relevant, because if you go back in time it wasn't always this ay, but i think the shift really began with clinton and the new democrats. i think after, you know, walter mondale lost in 1984, the democrats decided, you know, we're never going to lose the funding battle again. and they began this sort of imperceptible shift where they t continued to campaign on social issues, the same way they had before. theyetained their liberalism in that sense. but economically, they began to side more and more with wall street, and more and more with the veryth rich, and they've, i think we've now reached the point where neither party really reesents the very po in the way that the democrats maybe used to. oud so that's why you don't see it in the debates because neher party is really an
advocate for that kind of left behind class anymore. >> it is the people at the bottom. but it's also the people in the middle. you know the middle class is being hammered. those jobs are hollowed out. and where are the people pulling back and saying, okay, technology revolution, we love it. globalization. i love that, too. and i think it's great people are being raised up in india and china and now africa. but let's think about how our society and our politics need to change to accommodate this. and no one is doing that. meanwhile the guys at the top who are making -- who are doing so, so well, actually are saying, we need to slant the political system even more in our own favor. >> why are we so passive about this? >> well, i think firs of all, fie poor in this country have been incredibly demoralized. orether it's the relentless attention of, you know, bill collectors, or if you go to poor neighborhoods. i was out in queens last night interviewing a kid who's been
stopped and frisked 70 times already. he'22 years old. you have this constant interference by the police, if you live in a bad neighborhood. there are all these obstacles to getting up, and rising up, and having your own voice. and also, i think, in the media we get these res all rightless messages that being poor is your owh fault and people who are rich deserve to be rich a lot of americans are disillusioned about their situation. they believe on some level that if they're poor they deserve to be that way. so they're reluctant to go out and revolt the way maybe europeans in the last century, early in the last century would have. >> left unanswered. left unanswered, where does this vast inequality take america? >> well, i think to a very bad place. and i see two real and present dangers. one is, that you see an increase of the political capture. >> of what? >> of the political capture.of
so the people at the very, very top capturing the political system, and most usually, i think, smething that an economist who i call william boyter, he calls it cognitive capture, where he says look, it's not like this vast conspiracy. it's not as if, you know, everyone is on the paygll of the plutocrats, this guy, okay, he's now the chief economist of citigroup. he wrote this when he was an academic economists, so he's hardly, you know, some kind of markist on a barricade. his argument was that part of the reason the financial crisis happened s the entires intellectual establishment, not just people inside investment banks, but regulators, academic economists, financial journalists, had all been captured by the financial sector's vision of how the economy should work. and in particular light touch regulation. and i think there is a broader cognitive capture of, you know, you might call it the intellectual class.
the public intellectuals. around, maybe the inevitability of plutocracy. as matt was w saying this motio that if you're poor it's your own fault. you're part of this dependent 47%. unions are very bad. all of thatal sort of stuff. i think that that cognitive capture increases and i think what you see increasingly is, you innow, elites like to think of themselves as acting in the collectivew,interest, even as they act iniv their personal vested interest. and so what i think you end up seeing is social mobility, which is alrea i decreasing in the united states. inc dasingly squeezed. you see particularly powerful sectors, finance, oil. i would say the technology sector is going to be next in line getting lots of government subsidies. and meanwhile i tynk you see much less money spent on the things that middle class and the poor need. that's why you have this, you know, full bore attack on entitlements. right?
why is thenk plutocracy so enthusiastic about cuttinghe entitlement spending. because they don't need it -- >> where was the outrage when the $5 trillion or $6 trillion in bailouts was coming their way. >> i really worry about that. the other thing that i worry about is you do start actually stifling economic growth. so you know, if you want my dystopia scenario of the united states is america is moving into a more latin america style econo. a few incredibly rich having just great lives, and then people at the bottom really. struggling. >> we both lived that. we saw that in russia, it happened in the mid '90s. >> you both cut your teeth in journalism covering russia. what do you take away from that that is relevant to what's happening in this country? >> that experience completely shaped the way i look at the present situation in the america. in the mid '90s, suddenly when russia became a quote/unquote capitalist society, you suddenly
had this instant division of the entire society, into this very, very tiny group of people at the top who had more money than anybody in the world. and then there was everybody else who had nothing. >> and they got it through privatization. the government sold off the is resources. >> sold in quotation marks. >> that's the key part that i think people don't understand. what happened in russia was really a merger of state and private power that empowered this one inely nil cls. thereer was this moment in russia's history called loans rur shares. where a few people, a lotf them were ex-kgb types, were essentially handed the jewels of russian industry by the people in the yetten government. there were companies that were put in charge of theirf own auctions, so they -- >>they were all in charge of their own auctions. >> all in charge of their own auctions. so you wthld have an auction for an oil company, and a bank would be put in charge of that auction, and the bank magically, you know, would win the auction
for the oil company. which was worth billions or even hundreds of billions of dollars. ldd that's how they instantly created this super wealthy class of people,d and everybody else had nothing. this one story for me, this image that i'll never forget. i went to a coal mine up in the russian arctic north, where workers hadn't been paid their salaries for nine, ten months at a time. and when i went to the mine, the mine owners, the first thing they wanted to do was take me to their bright, shiny new lounge that they had built for themselves and show off their brand-new slate pool table that they had built with the money that they weren't paying to their workers. -nhat to me perfectly haexpress the divide in modern russian society. you have these pe le who are living off nothing on the one hand. andlehen you had these super wealthy people who had bann enabled who just kept the money for themselves. nhat's, i think, you know, it's aha caricature of what we're experiencing here in america b i think that's where the world is drifting toward now. >> you write about some of these super norich, not only with
insight, but with empathy. that is you've got to talk to a lot of them. you have moved among them as a financial journalist, been to davos and other places like that. and i'm won ring, how did you crack what is clearly a tight-lipped world? >> well, i guess the way journalists do it.ri just by talking to people, writing about them. i think you write stories that show people that actually you're interested in what they're doing. and what i would also say is, you know, i believe in capitalism. and i also actually believe in globalization and technology ref lulgs. if you gave me the option of turning the clock back to the 1950s i wouldn't do it. partly because i'm a woman and things were not that great for us then. you know, it's important, i think a mistake that the left an make, in criticizing income inequalitys toit behave as if this is entirely a political confection, it's entirely about political capture, there are no genuine, legitimate and actually
benign economic forces driving it. because i think there are. i think the winner take all economica dynamic is something thatis existing separate from the politics. the politics in the united states are exacerbating that division. rather than mitigating it. but i do think when youthull back and look at the global picture that was something important for me to do in the book it becomes a little bit harder t a say this particular american tax break, or even this american financial reform is the only thing driving income inequality. because the really remarkable thing is the extent to which this is a global phenomenon. it'sappening across the's western industrialized world. i'm canadian. so i'm practically born a socialist in the view of many americans. but even in canada, income inequality is increasing. it's even, you know, for awhile in economic literature the one outlyer was france, so far as economists make jokes, they ould say oh, the french they have to be exceptional even in this area. now you're seeing it increase in
france, too. and you're seoung it increase in emerging market economies. so i thinkng we do have to acce that there are some economic drivers. those economic drivers are partly put in place by the politics. allowed litics that globalization to happen. and in thenited states really crucially, and i think you can't emphasize this too much, look at ohat happened with the tax code. in the 1950s, this era when america felt itself to be a very conservative society, and it was. the top marginal tax rate was above 90%. >> 91%. i believe. >> just think about that. imagine if barack obama had said, in the debate, this wk, you know what governor g romneyi think america in the fiftys was a wonderful place. they, too, faced a real budgete deficit they had to pay off and the people at the very top were willing to pay a 90% top marginal tax rate.
would you be willing to do that governor? imagine if he had said that. >> you cover some of the same crowd chrystia is writing about but you do with complete irremember advance. do you still gain access to them? or have all the doors been slammed in your face? >> well, the very, very top people won't talk to me. y know, i don't have access to 'tthe same people that chrystia may be talking to. but i do talk to a lot of people who work on wall street. in fact, i got started down the road of this whole topic, youho know, after i wrote a couple of articles and suddenlythere was this outpouring of people from wall street who suddenly wanted to talk to me because they werey upset about the direction that the financial serces industry was taking. so i'm hearing a lot from pople sort of from the middle on downm and on wall street, and what they're really upset about is corruption, is this -- this merging of state and private power where the losers don't lose anymore.
i think the people who get really upset are small hedge funds, small banks, and they see companies like, you know, oup and goldman sachs and jpmorgan chase make mistake after mistake, and they get ou rewarded for it, but with bailouts, and even greater market shares than they had before. and so you know, my analysis is informed by those people, and i think, you know, i think chrystia andut i agree about a t of things about particularly about the growing divide, and how extreme it's become. my analysis, which might be a little bit angrier, just because, you knogs from the point of view that i'm particularly looking at is the corruption, and the use of force and state power to people the divide where it is and increase it. >> you both had pointed out that we tend to talk as if wall street and the plutocracy were a monolith. but it's not. do you think there is a civil war within the 1%? >> there is absutely aab schism
developing in this community. think about it just on one level on the level of banking. all right? you have ese too big to fail banks. everybody in the world knows that nobody is going to allow the very biggest commercial banks to go out of business. it will neoor. 2008 proved it. that if they ever get r. trouble the governmentmell come in and rescue them. what does that mean for those banks? it means it allows them to borrow money more cheaply. anybody who lends themll money knows they're always going to get paid off. in the worst casecenario cthey're going to get paid off. this gives them an inherent financial thvantage over the small, regional commercialal ba. which does not have that implied government guarantee. so those people are furious. they're furious that they have to compete against these gigantic monoliths tat have the implicit backing of the u.s. government. then there's the other problem of corruption. i hear all the time from hedge funds, you know, these smaller guys who beeve that some of the big investment banks are
selling them out to even bigger hedge funds that are giving away information about their positions to even bigger clients so that somebody else can trade against ehem. or maybe the banks themselves are front running their positions. and trading against their own clients. there's this schism developing between theti smaller guy, the medium sized financial player, and the very, very big too big to fail companies that are perceived as getting a break, getting -- and getting the backi of the government, and also are perceived as getting away with stuff that they wouldn't get away with. >> i agree with matt and i think hat you're really seeing, hatually, in terms of the battle of the millionaires versus the billionaires. because it's winner take all dynamic. is not just between, you know, the 10% and the 90%. or the 1% and the 99%. what's quite interesting, and leads me to really believe that there's some deep economic forces involved, is it's
happening just as much within the top 1%. op saw it in the recovery. we cited those statistics, bill, about 93% of the recovery going to the top 1%. 37% of t recovery went to the top 0.01%. so even in there, there's, you know, even more of a gap, and the people can be very, very aggrieved precisely becse, you know, they see what's going on. they see that unfairness, and it mases them really, really mad. you know one of the things that i found as i was writing my book and talking to plutocrats, as matt says, these are very, very smart people. and many of them, not all -- >> they work very hard. >> this is not downton abbey. this is not a landed gentry. these are people who even -- and even if they're sort of mitttt romney or bill gates who grew up very affluent, their actual business, they did build it
themselves. they built in a society that was very supportive of that but they built it. they're hardworking. they have to be thoughtful about the world because they're making investments. what i found was very interesting was they were very keen to divide the world into the good plutocrats and the bad plutocrats. nd what was very funny was everyone was happy to make that division. but, everyone felt that they themselves in their particular typat of business belonged to good plutocrats, and somebody elus belonged to bad ones. so you talk to e silicon valley guys. they love talking about this, especially after the financial crisis. because their view was, of course, income inequality is a problem. of course there has been state capture. by those bad guys in new york. we, however, are the innovators, we created value ourselves. we are completely pure and good, and these issues really have nothing to do with us. >> do you think they think they're really defending honest capitalism? >> oh, absolutely. you know, the one thing that's
consistent in my exposure to the financial services industry is that the people who work within it, and particularly the people at the very, very top, sincerely believe that theysi have not doh anything wrong. thand, you know, when you bring up things like the mass sale of fraudulent mortgage backed securities, it's just like you say, it's always somebodykelse who made that mistake. you know, we didn't know at the time that we were selling billions and billions of dollars of junk and we were dumping this on pension funds and foreign trade unions. it was always somebody else who was doing that. and they also have built up this very, very powerful insulating psychological justification for their lifestyle. they've adopted the sort of point of view where they genuinely believe that they are the wealth creators and th they should get every advantage eak, whereas everybody
else is a parasite, and they're living off ofe them. so when you bring up to them, for instance, how is it that nobody, despite this mass epidemic of fraud that appears to have happened before the 2008 crash, how come nobody quence has gone to jail after that? they always, you hknow, they always argue against more regulation, and more enforcemenen because they say we need room, we need air to breathe, room to create jobs, and this is just counterproductive to put people in jail. >> inially, though, this very sincere, absolutely, absolutely sincere self-justification, i think is one of the most dangerous things that's happening. because i our society, and i would sso this is particularly powerful in america, really since theld reagan era, there h been this vision of the successful business person as really a leader for the whole society. and there has been a view that the business person, what he thinks, and by the way, all of my plutocrats are men.
but you know, what he thinks about how society should be ordered, we should all listen to, because he, after all, is the hero of our time. is the hero of our capitalist narrative. and i think it's so important for us to really understand that what is good for an individual business, particularly in this age of very high income inequality, and the ways of thinking, the ideas that no doubt absolutely the right ones for this particular business, may very well not be good for society as ahewhole. >> both of you write in different ways that with irony that they threaten the system that created them. >> well, this is another thing, another image from russia that always stuck in my mind. and i studied in russia when it was still communist. i remember going through the countryside and you had all these villages and people walked around in he villages, and then suddenly in i the mid to late 's
in russia you drove throughhe russian countryside and suddenly there were big, brick houses uge walls on the outside. these big, brick walls with guardsuon the outside. it was the rich had courton of built thisall that insulated them from the rest of society. there was one society on one side of those walls and one society on the other side of it. ad i think that's where we're aded now. we have this kind of community of rich people who sort of live, hop from place to place, and they never have any sort of intercourse with the rest of the world. >> disconnected. >> they're completely disconnected. so they've built this kind of nation where inside it, it's all, you know, nice andw, everything works logically, and it makes sense to them. but they never really see what goes on on the outside. >> do they feel entitled? >> yes, absol ely. and -- >> for what reason? >> because they are treated so well. so my favorite story about this
bswas i was at heathrow airport about to go to a fancy conference, and i ran into someone else going to a fancy conference. a silicon valley. i didn't have a car. he had a car and offered to share a ride to the rent-a-car. the technology guy said to me,po when you live our life you are surrounded by such power and such entitlement you lose touch with reality. and his very personal example was, he said i was recently staying at this lovely four seasons hotel and i was beside the pool, i was eating a melon. and my skin fell to the ground. and he said before i could someone anyone, someone rushed up to me, with three spoons of different sides on a linen napkin, so that god forbid, you know, i shouldn't have the wrong size spoon. and what he said was, you know, what was amazing to me, he's talking about himself, is when i re-entered my real life that i was kind of ae jerk. because i real -- i expected to live a life where i was
constantly being presented with three spoons of different sizes. and i just couldn't deal with the frustrations of everyday life. what makes this a totally ironic story is here he's teing this kind of self-awareintory about the plutocracy. but when we had been in the airport waiting for the car, he was on the phone, screaming at someone about where is my car, et cetera, et cetera. this is morning in heathrow, middle of the night in san francisco, and he' yelling at someone there, because he hasn't organized his car and he had to wait for five minutes. and then he tells me this story about how entitletont can make you not an ideal person. that kind of says it all, right? >> the political behavior is another thing and there's no doubt in either of your minds, is there, that they tilt the rules in their favorhrough their influence and power over the politicians? no. absolutely. >> i mean our own government relaxed the regulations, upended the rules, leveled the laws, t make way for them. >> they have the power and
influence over the government to -- and they've been continually deregulatng the atmosphere toul legalize whatev it is that they want to do. whether it's mergers of insurance companies, investmen banks and commercial banks. derivatives, the commodities futures modernization act of 2000. they lobbied to create a completely deregulated atmosphere with that and we saw what happened in 2008 with the collapse of apps like aig. they've been incredibly successful in creating their own landscape where they get to do business the way they want to do business. >> and what i think is crucial is this is not framed as i want government to do this, so i can get rich. and my company can prosper. this i framed as, we need to do these things for the greater good. and this is where i think anoth big problem in america today is a disempowering and a devaluing of the role of
government, and of its authority as an independent, respected arbitrating body in the center of the ring. and one of the great contrasts for me in the past decade has happened in at what bank regulation in the united states, and looking at what happens in canada. matt has just spoken about bank mergers. with mind sight one of the great grave decisions taken by the canadian government was to not allow the canadian banks to merge. they wanted to. huge lobbying effort and they made the same arguments about oh, if we can't merge we'll never operate on a global scale, canada will be left behind. we'll be a prudential backwater and the government just said no. and that decion, i think, flows directly into tde canadian government's ability to regulate the financial sector, leverage at u.s. levels was not allowed. and the consequence was canada didn't have a financial crisis.
it's the only g-7 country that didn't have to bail out its banks. so government can actuallyan -- >> not if it's captured. >> not if it's captured. c and it is captured. >> now we're completely captured with the banking example now we have these banks that are literally too big to fail in america because we didn't do the same thing. >> but government can act. i think it's important not to have council of despair. that you c have a sophisticated, industrialized western economy. people can live, you know, civilized lives. they can have bankers, they're bankers, maybe they're not going to earn $25 million. but they can earn $5 million and $6 million, they can be perfectly affluent and government can actually stand up to its banks and stand up to other secretaries of industry and say you know what, i'm sure that would be great for you guys. my judgment is, it's wrong for the country, and you're not going to do it. >> they resent any credit civil, despite all the advantages and entitrements they have. they also exhibit disdain as
mitt romney made clear in that infamous or famousm47% video. when he talkedbout other people being dependent on government. >> i've heard that attitude more than once. and not just from mitt romney. i think it's, ttagain, it's consistent with this mind-set, the's an intellectual atmosphere that these people have to work wi'sin in order to justify a lot of what they do. because you have to be completely disconnected fro the real world in order to do things like sell fraudulent mortgages to a state pension fun f if you're actually thinking about that, you're taking somebody's life savings away when you do that. but you can't think about that. >> tt, you quot the billionaire charlie myunger of berkshire hathaway who said anyone who wants to complain about the wall street bailout should realize they were, quote, absolutely required to save your civilization. what did he mean bythat? >> well, again, this group of people believe that all of civilization depends on their
health and their well-being, so when they weret? threatened, in 2008, when they were all about to collapse, it made absolutely sense to them that they shuld -- that the govnment should immediately intervene and give them as much money as they needed not only to get back onn their feet but to restore their lifestyles, to the level that they had been accustomed to. >> so i'm going to hear step in as a voice in favor of the bailout. i think myunger was right, i do actually -- >> sang civilization? >> i think it was. i think that the bailouts were absolutely essential. i think that had there not been a bailout, which by the way, let's remember, voices on the right as well as the left were s objecting to the bailout at the time. i think had there not been bailout you would have had a muchore severe eisis. u would have had a full financial collapse, andu much, much deeper economic recession. nowmu i think where you can and should criticize is first of all, why was e crisis allowed to happen in the first place? and theregulatory failure
beforehand. i think second of all, you know, where were the strings attached? and actually, charlie myunger's great business partner warren bufft drove a much harder bargain with goldman sachs than the u.s. ttasury did. you know, 2008 is nots. so long ago. and already the anti-regulation chorus is so rong, you know, i think the reregulation was not done well at all. but the fact that people are already making a very, you know, powerful and proud argument against governmern regulation, bankers are making this argument. i meanar how dare they? how dare they have the gall to actually argue that t much regulation of american financial services is what is killing the economy. >> right, right. just to be clear, i actuallyin agree thatlyhe bailouts were necessary.he what i completely disagree with was the way they were done. they just simply threw a whole bunch of money at this community
and didn't he any conditions at all. they didn't swep in and change any rules. you know, after the s&l decree sis for instance. there were massive criminal investigations. we put 1,000 peopl s in jail. there were no such investigations this time around. so this was just making everybody well again and restoring everybody to the status quo, which i think was a major mistake because itbo produced producelyhe result we're talking about now. it allowed everybody to think that the previous status quo was okay. >> let me talk about the ceolo class. because it seems almost every day now there's a new story of some ceo, some boss of a big company who's attempting to telt voters, to vote as they say. what do you make of that? >> if you really see yourself as a job creator, someone who is aot just pursuing their business interests, and getting richer, but someone who is creating jobs, doing great things for america and for your workers, and you also sincerely believe that barack obama is a bad guy,
then you feel you have to help your workers to understa rsthis. you know, you have to let them know that you, the job creator, believe that this job creation, of which they are the fortunat beneficiary, you know,he that engine is going to slow down, it's going to grind to a halt. >> do you see this as different from what unions do in urging their voters to go out and vote for the candidates of their choice? do you see n differently? >> i think it's a little re different, just because they're -- there's an implied thre threat, it's very, very vague. but if the ceo of your comny suggests to you that you have ty vote for mitt romn, or you have to give money to the romne, campaign, i think the tendency to not break ranks is going to be a little bit stronger than maybe it would be in a union. but i think it grows that as companies and corporations are not democracies. they're authoritarian structures and the people who wory'in those
companies w they start to adopt those attitud after awhile. especersply the people at the very top. i think they've begun to actually believe that their authority extends beyond lythat and i just think that people, it's a little bit different when your boss tells you to do something than when, you know, your union brothers tell you. >> matt, you have written a lot about tax code, and the .utocrats. exactly how do they work the tas system? >> the plainest example is mitt romney. if you look at his tax returns, he paid, you know, rates of 14%, 13%. that's 20e9ally normal in this world if you work in a private equity fund. your income -- >> he's not an exception, he's an embodiment. >> in the financial services sector for sure the very, very rich, mostly receive income as capital gains or if they're private equity people as carried interest. and both of those the max rate is 15%.
so people who make $20 million, $30 million, $50 million a year like mitt romney and like, you ksw, steve shartman or whoever it is they pay half the tax ra f a nurse or a doctor or a fireman or a teacher. an it's considered totally normal in that world. >> so they really do consider tax reform a threat? >> absolutely. i mean, every time that there's been any discussion about rolling back the carried interest tax break in particular, there's suddenly been this intense hurricane of lobbying, and it never seems to get rolled back. barack obama promised to repeal that tax break, and didn't do it. >> give us a working definition in the vernacul of carriedac interest. >> so basically what this means is that if you're in a -- if you work in a private equity firm, the money that you earn -- so ye invest a little bitof your own money. and the gains that you make on that investment would be treated
definition as a capital gain taxed at 15%. but you also earn ney, because you are investing on behalf of all of your investors. that money that you earn, it's called carried interest. and it is treated as a capital gain in the same way that the gains to the investors are treated.u the economic arguments in favor th the carried interest tax break are so weak. i mean, even mike bloomberg, who is you know, very -- >>disinterested. >> far from being a socialist, he has come ou and said he doesn't support it. and it says somethinto you about the power of very well-heeled, very focused lobby groups that, you know, barack obama is president, he is opposed to this. he says he's opposed to it. even mike bloomberg is opposed to it. so there's a body of wall street opinion who thinks it should go away. it's still there. >> when there was an effort, when the obama white house and others ma an e mort to revoke
carried interest, the fight was led bor people like democrat senator chuck schumer representing wall street. >> new porkers. >> new yorkers,>> of course. that's their constituency, they wld say if they were sitting here. ldbut the democratic party didn come to the aid and relief of working people at that time. >> well, right.he because, again, but it's because you have a small, very, very concentrated lobby that is very, very noisy, and is very, very specific in what it wan and what it needs. and then there's the rest of us who how many people are really thinking about the rried interest tax break? the advocacy against the carried interest tax break isrr disburs, it's sort of random. it's not focused. whereas the advocacyfor it is incredibly organized, it's disciplined, and it has a ton of money. >> and it is bipartisan. >> who's looking out for the rest of us? >> well, there definitely are good people inac washington. you know, i meet and talk to a lot of them. there are a lot of honest politicians. and who are trying to do the right thing. but, the -- my experience, the
money issue is so overwhelming to people in congress, that -- >> raising money for their campaigns? >> raising money for their campaigns. it's so central to their daily lives, really, and especially in the house, where you have to essentially start raising money the instant you get elted. because the election -- rteelection campaign is only a couple years away, that there's -- it's just too overwhelming for most legislators to get past that issue. >> despite how the plutocrats have reacted to barack obama, he does not seem to be lack fdr taking on the economic loyalists or like theodore roosevelt, fighting the guys he says are tang the country down. how do you explain obama's attitude toward these plutocrats? >> barack obama in many ways is one of them. hess educated the way a plutocrat is educated. he had an opportunity to join
the plutocracy. he could very easily right now be a top corporate lawyer and they know that. he thinks the way they do. he's a technocrat in the acceed matter of the plutocracy. and i thinkedthey like that. i think that's why he has such a strong reception in 2008. i think that's one elemhit.t. another element, thugh, and i think this is something that sort of bothers them is, he isn't over awed by them. and that kind of bugs them, too. because they do tink they're pretty great. >> to answer your question about why is he -- why doesn't he take the sort of attitude of an fdr or teddy roosevelt? i justta think barack obama has surrounded himself with people like larry summers, like bob rubber and he's accepted a lot of stification and arguments that come from wall st aet and the busi bess community. so i don't think he feels
genuine class-based rage towards this community. i ust don't think that's in him. i think if you listen to rush limbaui and sean hannity andmb thelikes, they really believe that somewhere under there, there is this -- there's this ragingli socialist, and lennon ready to break out and put them all up against the wall in a firing squad. that guy just isn't there. he really is more one of them than they think. >> you don't think he's fighting class warfare in the ri t sense here? >> definitely not. no. i think he's very emot hnally and culturally much closer to those people thna he is to the rest of us. >> no, but he is movingvi -- he is, and i don't think he says this as directly as perhaps, you know, some of his supporters would like, he is challenging this notion of the successful businessman as the hero and the driver of the american narrative. and that actuay is a bis -- if
you think it through to its logical conclusion, that is a big challenge. accounts for at this hurt, this seemingly completely disproportionate emotional reaction.nt >> he's made a rhetorical istake in the way he's occasionally described this community. that's what's inspiring this whole reaction against him, this feeli that we are like battered wives, cause they've occasionally been described as rich. >> so it's easy to laugh about this, and we should. but this hurt feelings, the fact that this is really playing out in the emotional space, as well as in the balance sheet space, i think is really an important point. i think it's hard for us civilians to get it because it seems to absurd. you know. really? that would hurt your feelings? are you so thin-skinned? but its real.
and i think that it's real for a reason. which is i think that barack obama, the democratic party, but also the political discourse more generally is posing an existential threat, certainly an existential question to the plutocr plutocrats, which makes them very, very anxious. >> i haven't heard that, chrystia. barack obma said in the debate this week that he sounded like -- for free enterprise. >> andma i'm for free enterpris too. but what he has -- >> didn't sound very tough on them. >> but there's an underlying point that he does make, i think he should make it more explicitly, which is to say that american capitalism is not working the way it was in the '50s. m that we are not living in a time when a rising tide isifting all boats that we are seeing the people at the very top take off. their economic fort rns actually disconnect from those -- >> stratospherically. >> and from everybody else. and they're not dependent.
you know, that all of henry ford model where you needed the model class to be well paid to buy henry ford's stuff, that that has broken down and wly could argue a lot and we should about the reasons but the facts are that it has. and so say that, to actually state that, is profoundly threatening. because, it starts to break down this equation ofac my wealth equals my virtue. the size of my bank account -- it isn't just good for me. it is a manifestation of my civic contribution. and that in some ways is mitt romnes campaign. he's saying, i'm a successful businessman so i will make a good president. and barack obama, he's actually saying, youanow what? i don't think that th y equation works and is automatic. and actually, in saying that, the plutocrats are t not wrong detect there a very powerful ideological challenge. >> if the plutocrats ep on winning, if they manage to avoid tax reform, if they keep low
regulation, if they get a president who is sympathetic to them, or even enables them, what's ahead for us? >> well, i mean, i fear that what's ahead is just the continuous worsening of the situation. you know, what we've seen in our lifetime, even since w ve come back from russia, isve this des nation of the middle class in america. if we continue on this path what we'll end up with is, you know, is russia or some oer third world country where, again, you have this handful of people who are -- who are protected.of and who have expanding wealth, and then there's just this sort of massive population of what ody else, and that's i worry about. >> i would like to treally iss a clarion call to progressives. because i think this sort of -- the progressive public intellectuals are to blame, as well. i think a big reason people aren't protestingss no one is offering sufficiently compelling
alternatives and solutions. and when you think back to the ndustrial the revolution, the progressiven er, the new deal, these were brand-new ideas. and brand-new institutions designed to cope with changed economic circumstances. what i think is the challenge for everyone who was worried about this, and i think all of us should be worried about it. we should be terrified, but i think we need to start taking the next step, and we need to realize the 1950s are not coming back. what angers me sometimes about these debates is people talking about manacturing jobs coming ma back. that is just not going to happen. >>right. >> so rilet's really face the ft of h this economy works and really come up with what needs to beof the politicaand social response.an and frankly i see the right not interested in addressing is issue at all and i see the left not offering enough new thinking. and people know that and that's
why people aren't on the barricades. there's no manifesto to be waving. >> one caveat i would like to throw in there is that any time you propose anything that has any kind of government, you know, component to it there's this automatic criticism that it's communist and socialist. when you come up with a solution, the boundaries are let's come up with a solution that doesn't have, the -- that can't be criticized as being communist or socialist. and that is -incredibly diffict for people to work around. >> okay. but let's at least see the new ideas. >> sure. >> my argument is, we are lving through equally profound economic transformations and we're just trying to rehash and retinker with the 20th century institutions. i don't think it's enough. >> matt taibbi,iays c ys freeland, thank you very much for being with me. >> thank you. >> pleasure, bill.
here's our significant revelation of which you may not be aware. the plutocrats know it and they love it. and the rest of us should be forewarned. when the supreme court made its infamous citizens united decision, liberating plutocrats it buy elections fair and square tices may have effectively overturned rules that kept bosses from ordering employees to do political work on company time. election law expert trevor potter told us that now, corporations argue that it is a constitutionally protected use of corporate resources oer employees to do political work or attend campaign events, even if the employee o opposes the candidate or is threatened with being fired for failure to do what the corporation asks. reporter in new york times magazine came across a recording of governor mitt romney in a conference call in june with some business executives. the government told him there
is, quote, nothing illegal about talking to your employees about what you believe is best for the business. because i think that will figure into their election decision. their voting decision. and, of course, doing that with your family and your kids, as well. and here's governor romney two months later, campaigning at an ohio coal mine. >> this is a time for truth. i listened t an ad on the way here. i'll tell you, you got a great boss. he runs a great operation here. and he -- there he is. >> look at all thosehe miners around him, steadfastly standing in support, right? they work for a company called murray energy. and attendance at the rally, without pay, was mandatory. murray energy is notorious for violating safety regulaons. sometimes resulting in injuries and deaths and the company has paid millions in fines. the ceo, bob murray, is a well-known climate change denion
and cut throat busiessman. he insists that his employees contribute to his favoritebu anti-regulatory candidate, or else. in one letter, uncovered by the new republic maazge, murray wrote, quote, we have been insulted by evazy e salaried employee who does not support our efforts. so much for voting rights and the secret ballot at murray energy. he also discovered that the coke brothers, david and charles, who have pledged to spend multimillions of dollars to defeat president obama, have sent a voter information packet to the employees of s georgia pacific, one of their subsidiaries. it includes a list of recommended candidates, pro-romney and anti-obama editorials written by the cokes, and a cover letter from the company cress. if we elect the wrong people, he writes, many of more than our 50,000 u.s. employees may suffer the consequencesncluding higher gasoline prices, runaway
inflation and other ills. other ills? like losing your job?g thithis snow isballing. time share king david siegel of west gate resort reportedly has threatened to fire employees if brk brk is re-elected. and arthur allen who runs asg soft ware solutions e-mailed his employees if we fail as a nation to make t right choice on november 6th, and we lose our independence as a company, i don't want to hear any complaints regarding the fallout that will most likely come. back in the first gilded age in the 19th century, bosses in company towns lined up their workers and marched them to vote as a bloc. as we said, the beginning of this broadcast, the gilded age is back with a vengeance. welcome to the plutocracy, the remains of the old usa. that's it for this week. on our website, billmoyers.com at your request we're starting a
book club. our first is chrystia freeland's plutocrats. read the book. ask questions. share your thoughts. then let's have a lively conversation. that's at billmoyers.com. i'll t you eehere. and i'll see you oure, next time.yo don't wait a week tomeet more moyers. visit billmoyers.com for exclusive blogs, essays, and video features. this episode of "moyers & co." is available on dvd for $19.95. to order, call 1-800-336-1917. or write to the address on your screen.to funding is provided by
carnegie corporation of new york, celebrating 100 years of philanthropy and committed to doing real and permanent good in the world. the kohlberg foundation. independent production firm with support from the partridge foundation, a john and pauley guff charitable fund. the clement foundation. park foundation, dedicate to heightening public awareness of critical issues. the hercaalpert foundation. supporting organizations whose mission is to promote compassion and creativity in our society. the bernard and audrey rapport foundation. the john d. and katherine t. mcarthur foundation, committed to building a justalore verdant world. and the betsy and jesse sync foundation. the hkh foundation. barbara g. fleischmann. and by our sole corporate sponsor, mutual of america, designing customized individual and group retirement products. that's why we're your retirement company.an